2017 (4) TMI 264 - AT - Customs

Classification of imported goods - PVC inflatable toys - denial of benefit of preferential duty under the Asia-Pacific Trade Agreement - Held that - The description in the catalogue makes it amply clear that the imported goods are reduced models - the imported goods are classifiable under heading 950330 of the First Schedule to the CTA 1975 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported goods under the Customs Tariff Act, 1975 as toys or sporting equipment.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the classification of imported goods by M/s Ayush Toys Marketing Pvt Ltd. The goods in question were 'PVC inflatable toys' imported under bill of entry no. 5861206 dated 4th July 2016. The Commissioner of Customs classified the items under heading no. 9506 9990, denying them the preferential duty under the Asia-Pacific Trade Agreement. The specific items denied preferential rate were identified as swimming pools and paddling pools, based on the description in the advertising/marketing literature as 'pool'. The first appellate authority upheld this classification, considering the goods as paddling pools based on their functionality and description. The appellant contested this classification, seeking to quash the demand for higher duty, highlighting the recurring nature of the issue and pending consignments for clearance.

The appellant's argument relied on notification no. 113/(RE-2008)-2004-2009, which relaxed the prohibition on toy imports subject to specific standards. The appellant also cited precedent from the Hon'ble High Court of Madras emphasizing the continuity of classification unless circumstances change. The Tribunal analyzed the classification issue, focusing on whether the imported goods should be considered toys or sporting equipment in the form of paddling pools. The description on the package labeled the goods as 'paddling pools', prompting a closer examination of the nature and purpose of such products.

The Tribunal deliberated on the definition of 'paddling pools', emphasizing that these products are typically smaller and shallower versions of swimming pools suitable for children's activities. Upon assessing the dimensions and functionality of the imported goods, it was concluded that they were reduced models of actual paddling pools, lacking the necessary features for swimming exercises. Precedents from the Hon'ble Supreme Court and High Court of Bombay were referenced to support the argument that dictionary meanings alone should not dictate classification, emphasizing the context of the entry for duty levy purposes.

Additionally, a decision from the Tribunal regarding the classification of 'toy musical instruments' was cited to distinguish between different types of products for accurate classification. Ultimately, the Tribunal determined that the imported goods should be classified under heading 950330 of the Customs Tariff Act 1975 as toys, overturning the previous classification and allowing the appeal. The judgment highlighted the importance of considering the practical functionality and description of goods in determining their classification under relevant tariff headings.